Friday

Detroit rents still a bargain

It's getting pricier to rent an apartment in the trendiest parts of Detroit these days, but landlords still can expect more upside in rental rates.

Renters in Detroit continue to spend less than the 30 percent of their income for monthly housing expenses, considered to be the rule of thumb of affordability. That's according to Apartment List, a San Francisco-based website that has more than 1.7 million monthly visitors and features listings for more than 600,000 apartments nationwide.

Apartment List found that Detroiters spend 27 percent of their income on rent.

Monthly rent for a one-bedroom apartment increased by 2.09 percent to $620 and by 1.74 percent to $744 for a two-bedroom Detroit apartment in 2013, according to Apartment List.

"Detroit is still reasonable in terms of rental costs," said John Kobs, founder and CEO of Apartment List. "Detroit has one of the lowest rents in America — it is the eighth lowest out of the top 100 cities by population."

Austin Black II, president, City Living Detroit

Austin Black II, president of City Living Detroit, said he has seen recent average rental rates between $1.20 and $2 per square foot.

"Prices are on the rise, and people are being priced out" of the downtown, Midtown and Corktown rental markets, he said. "That's converting some people to buyers: 'I can own a home for the same amount, if not less, than paying rent.' And, people now are looking at neighborhoods near the downtown area" like Boston-Edison, East Village and Indian Village, and Lafayette Park.

Black said he believes rents will level off in Midtown, Corktown and downtown as new apartment and loft developments there hit the market.

Kobs said even though Detroit isn't following the trend, in most markets people are spending more on rent while earning less.

New York City remains the most expensive place. The average rent for a one-bedroom unit is $3,269, highest in the nation and 58 percent of household income.

Boston residents spend the greatest percentage of their household income on rent. The average rent for a one-bedroom is $2,663, or 62 percent of household income, according to Apartment List.

Rents in Portland, Ore., increased the most from January 2013 to January 2014. They rose by 10.01 percent to $1,321 for a one-bedroom unit.